Post-open Review

Gap up extends.

The overnight recovery up to this morning’s 2605.00 bias-up signal finally broke higher just before the open. The pre-open surge touched 2606.75. Dipping into and out of the open twice tested 2604.50 as support. Reactions up probed higher and higher.

The open was likely either to quickly decline — sooner than did yesterday’s similar setup — or else trigger bias-up. Holding positive territory made bias-up increasingly likely to trigger, which it did, now targeting 2610.00.

2610.00 has been attacked already to within 5 ticks at 2608.75. The target remains in-play so long as pullbacks now hold 2605.50 as support. Nothing requires the rally to persist after fulfilling 2610.00. Little prevents a deeper pullback before fulfilling 2610.00. But already reacting down from 2610.00 before this afternoon’s Senate tax development would be vulnerable to trending back down.

Bias-up tested, held.

Having touched both bias signals overnight, this morning was likely to retest one — whether, or not, actually triggering its bias. So, being precluded from signaling inertia, consolidating around the 2601.75 open wasn’t likely to hold still. And it didn’t.

Surging before the opening 15 minutes lapsed was extended to a new high at 2605.50. Its 3-point reaction down to 2602.50 avoided triggering the 2604.50 bias-up signal. This is a no-bias environment. A test of its 2596.50 bias-down signal is in-play. That’s also last night’s low, for which there’s no bullish reason to retest.

Meanwhile, contrary signals are in-play. The bias parameter’s downside attraction may have to wait in line for a buy signal above 2603.25 that the open had triggered. Its pullback limit isn’t yet violated, despite having been probed 30 minutes earlier.

It’s too late to invalidate the no-bias by 10:30. Fresh highs would be “no-bias trending,” and doomed to failure. At least, required to retrace the 2604.50 bias-up signal. But back under 2602.25 would be entirely credible for the no-bias signal’s downside being fulfilled.

Bias-up preventing constructive pullback.

An opening dip attacking 2597.00 would have been the morning’s most reliable bullish scenario. An attraction back up to the 2602.50 pre-open high could have restarted the overnight rally. But the open has only ranged narrowly at or under 2602.50.

Meanwhile, bias-up has triggered, targeting 2604.50. Back above 2601.50 (being tested now) would start to signal its test underway. Meanwhile, back under 2599.75 (not yet pierced by at least 3 ticks) would make a detour likelier down to 2597.00 (+/- 1 tick) first — under 2500.00 would confirm.

At least 3 of the first hour’s five 15-minute checkpoints all overlapped the same relevant level, the 2600.50 opening print. This suggests inertia, if not preventing trending this morning, then at least ensuring a trending attempt will be retraced.

Inertia, or not, hovering around the open isn’t likely to define the session. Triggering bias-up gives the upside a benefit of the doubt. But all signals should be viewed a little skeptically today, due to low holiday volume, today’s early close, and the weekend’s impending illiquidity.

Inertia leaning toward “dry cleaners” morning.

The pre-open retest of the overnight high touched this morning’s 2600.00 bias-up signal before reacting down 3 points. That wasn’t confirmation of today’s difficulty to attract trending sponsorship. But it wasn’t a contradiction. Bouncing into and out of the open came within 1 tick of 2600.00 before also failing. Still not confirmation, but closer.

Now fresh lows are attacking the 2594.50 overnight low to within 1 tick. And despite this being a “no-bias environment” without a required objective, dipping further has room to test its 2591.75 bias-down signal as support.

The bias-down signal’s test would have been required if the bias-up signal had held a test post-open. Pre-open isn’t a reliable reflection of intraday sentiment to gauge excessive optimism.

Meanwhile, 3-4 of the first hour’s five 15-minute checkpoints overlapped the same relevant level — the 2598.00-2598.25 open. This suggests even more so what we already knew, how difficult today is for attracting sponsorship. Often, this produces a “dry cleaners” morning which can be an opportunity to run errands.

And no “unfinished business” outstanding.

Last Thursday’s rally had triggered its afternoon bias-up signal, putting into play its 2590.50 bias-up target. Attacking it to within 1 point wasn’t enough to fulfill it, and it remained outstanding as “unfinished business above.”

Touching 2590.50 overnight fulfilled the objective. But that didn’t prevent probing higher pre-open up to 2592.25. And the opening print was essentially 2590.50, which blipped-down to attack 2589.00 before surging to new highs testing 2596.00.

That was only the first 15 minutes or so. The first hour has extended to attack 2599.00. Both timing windows exceeded any prior high that had been overlapped, preventing sellers from regaining traction.

Having renewed the bias-up signal by exceeding its bias-up target through 10:15, the renewed bias-up target at 2600.00 remains in-play. Being so much further removed from the pattern that identifies it, renewed bias targets are less reliable to be met. It’s an attraction, but it won’t become “unfinished business above” if not fulfilled before the bias environment begins lapsing at 11:30.

Volume historically starts evaporating at a faster pace this afternoon ahead of Thanksgiving’s travel day. Retracing ground already covered will be easier than forging relentlessly higher. Currently, a pullback has room down to 2595.25 before reversing the trend down — either to 2591.75 or 2588.25.